Bank Loans Flood Market

Banks are increasing lending to businesses, but the cheap rates and flexible terms some offer are raising worries about the risks. Photo: Getty Images.

This transcript has been automatically generated and may not be 100% accurate.

... I ... EU leading to the banks to stop me a lot of business school ... the Wings Over started happening see right there ... the Money Investing section today a line of business loans in the market ... talk about that we have the author of that article Shayndi race with us ... I he is rationing the person of the graphic ... up our business loans back into soda prerecession peaks is that we're seeing right now ... we are seeing that this is the one bright spot and the date they are desperate to put some of its capital T used the problem is that there aren't that many credit worthy borrowers so ... we're not back to where we were before and you know to be clear this is just loans to small and medium and large business and ... so we're we're not talking about of all ... loans to ... the really all-star diagram were talking about rate were talking about commercial and industrial loans ... and cabin and insisted that one area we are that the nxt are starting to ... put their money there ... I'm now the issue is that there's still a tremendous amount of ... competition for these credit worthy borrowers because there still aren't that many people out there who can ... calm qualify for loans loans so we are seeing is that these things are ... you getting out some ridiculously low interest rates ... on ... student unbelievable terms not asking for much in in return from people ... on an inattentive when the Disney dream that I mean in inattentive and this is because there's just so much competition of it is limited supply of good borrowers ... and so the concern is that down the line this will prevent all sorts of bread for and that's what we saw it in the housing bubble where lending standards just went completely overboard there were none ... that's that's gonna be the theory ... but the breaking news ... on the phone being driven by demand or is it being shown by the fact that ... the Fed's unfunded these banks with money into lots in them than to put to work ... and which way is to come so this is really interesting from what I'm hearing it's actually not the standards that are going down but it's that comes on the law on me and if interest rates and so the fear in as much that they're going to be letting people who can't pay them back that the fear is that there can be locking themselves into these very low interest rates for ten years or something like that that's what we're seeing something seemingly just ... from what I'm told routes of the unheard out ... and that makes it very hard for the Sphinx to make money ... so we're really talking about the risk on the terms side in the interest rate side not so much on the lending standards I ... aam still in terms of what the risk if it's really just a risk that these things are going in the making awful lot of money and are locking themselves in for something like ten years on these low interest rates when I felt like the interest rates should grow I write it sounds good right now ... put down the road you can read back in effect kill the bank's profit ... rate but it could be the year with margins akin exactly that's really where this is hurting this is hurting the margins and if the problem that ... is ... no affecting beings now the net interest margin which is obviously this measure of lending profitability is very well in its topping and this is just ... hurting the margins even more ... so that's really what the issue ... she knew I think you're a much it's going to Apple ... Isle of